Latest news with #pensionFunds
New York Times
09-07-2025
- Automotive
- New York Times
What Happened to Tesla's Annual Meeting?
Tesla is days away from missing a deadline to hold an annual shareholders meeting, exposing itself to lawsuits and amplifying criticism that the carmaker's board of directors has been inactive while sales and the stock price slump. In Texas, where Tesla is incorporated, the law requires companies to hold annual meetings no later than 13 months since the previous meeting. In Tesla's case, that would be Sunday, July 13. Tesla has not announced a date for a meeting or filed any proxy statements — the documents that describe the annual meeting's agenda, the candidates for the board and proposals to be voted on. The meeting would normally provide shareholders an opportunity to speak directly to Tesla's board and to Elon Musk, the chief executive, at a critical time for the company. Tesla sales have been plunging, and the stock price has fallen almost 40 percent from a peak in December. 'This lack of transparency raises serious concerns about the company's respect for shareholder rights,' a group of state treasurers and other representatives of large shareholders said in a letter to Tesla on Wednesday. The shareholder representatives, including Brad Lander, the New York City comptroller, and treasurers or comptrollers of Oregon, Illinois and Maryland, oversee pension and investment funds that own hundreds of millions of dollars in Tesla shares. They were among 27 shareholder representatives who signed the letter, including pension funds from Denmark and Sweden and religious groups like the Friends Fiduciary Corporation, a Quaker organization. Want all of The Times? Subscribe.
Telegraph
07-07-2025
- Business
- Telegraph
Reeves' ‘communist' pension plans are a bad idea
A number of countries, such as Iceland and Taiwan, have requirements for pension funds to invest a portion of their total assets domestically. The UK currently has no such rule, though there is a voluntary so-called 'Mansion House' accord whereby major UK funds agree to invest at least 5 per cent of their assets in UK private markets. Since earlier this year, Chancellor Rachel Reeves has been trying to mobilise pension assets as a way to boost UK investment, thus helping with our weak growth and more recently there has been talk of extending the Mansion House accord to increase the UK share. Do such schemes really make us wealthier, though? If UK pension funds feel they get the best risk-return ratio by investing in France or the UK or Korea, why would it make the UK any richer to force them to turn down those higher-yielding, less risky investments in exchange for less attractive UK alternatives? Doing so reduces the return on UK funds, making the UK citizens whose pensions those funds do or will pay worse off. Those worse off UK citizens will themselves consume and invest less. Furthermore, by forcing those monies into UK assets, the pound is artificially strengthened, making UK exporters worse off, costing jobs and investment in those industries. If UK investment projects are attractive, investors from all over the world are available to provide capital. We don't need to distort markets, harming UK pensioners and UK exporters, by forcing UK pension funds to invest in projects international capital markets have turned down. It isn't that the country is brimming with high-return, low-risk attractive investment projects but there simply isn't any money available to inject into them. Rather, the problem with the UK is that it isn't an attractive place to invest at present. Taxes are prohibitively high and going higher. Infrastructure is old and deteriorating. Planning processes are lengthy and expensive. Workers are abundant and still by European peer standards have limited unionisation and worker regulation but the politics is moving in a negative direction. The Chief Executive of Lloyds Bank, Charlie Nunn, has compared the proposals to make pension funds invest directly in the UK to 'communist' Chinese rules. That's probably going to bit too far to get the message home, but we understand the point. Once you start down the road of capital controls it's a long way back, and with the rest of our politics turning into a 1970s chaotic stereotype, investors might well start to feat 1970s-style capital controls would be just around the corner and steer clear of the UK altogether. Modern global capital markets are a source of huge wealth and opportunity. Let's not try to segment ourselves off from them.
Wall Street Journal
03-07-2025
- Business
- Wall Street Journal
JGB Futures Edge Lower Ahead of Japan's 30-Year Bond Auction
0018 GMT — JGB futures edge lower in morning Tokyo session ahead of Japanese Finance Ministry's auction of about 700 billion yen of 30-year sovereign debt. 'The auction is likely to be digested smoothly as we expect demand from pension funds,' Citi Research's Tomohisa Fujiki says in a research report. The outcome of this week's 10-year auction suggests direct bidding without dealer involvement has grown. 'In addition to normal participation by some banks, we think it reasonable to assume purchases by pension funds have increased due to the rise in stock prices,' the rates strategist adds. The 10-year JGB futures are 0.09 yen lower at Y139.03. (
Zawya
02-07-2025
- Business
- Zawya
Foreign investors increase dollar hedges on US stock portfolios
NEW YORK - Overseas asset managers and pensions are adding protection against a weakening dollar, concerned about the U.S. currency's diminishing ability to diversify their U.S. equity portfolios. Because such stock funds carry built-in dollar exposure, investors with other home currencies that had not neutralized the foreign exchange risk were cushioned when the dollar was strong if Wall Street performed badly. But the dollar's correlation with other U.S. assets, and the impact of its fall on portfolio performance, came into sharper focus when the Trump administration announced far-reaching global tariffs on April 2, sending U.S. stock indexes and the greenback sharply lower. The dollar hit a three-year low against a basket of currencies, raising risks for investors whose portfolios once benefited from the natural hedge. Now, managers are reducing dollar exposures and increasing the hedge ratios for U.S. stock portfolios where clients' investment policies allow them to do so. About 10% of Russell Investments pension fund clients in Europe and the UK have already increased hedge ratios on their international stock portfolios, said Van Luu, global head of solutions strategy for fixed income and foreign exchange for Russell in London. One client raised it to 75% from 50%, highlighting the desire to have a greater portion of U.S. stocks protected against the weakening dollar. "If what we're seeing persists... then you will have more clients taking action in that direction," said Luu. 'MORE HOSTILE' The dollar is down 10% for the year, and 6.5% since U.S. President Donald Trump's so-called Liberation Day in April. Meanwhile, the S&P 500, the benchmark U.S. stock index, has recovered 24% since an April slump and is up 5.3% this year, flirting with record highs. The MSCI gauge of global stocks, minus the U.S., has risen 16% for the year. "It's not enough to look at the stock market and say it is more or less back to where it was, so nothing happened," said Peter Vassallo, FX portfolio manager at BNP Paribas Asset Management, who manages currency exposures across its asset classes. BNP has been reducing dollar exposures for its clients that include pension funds, sovereign wealth funds and central banks. It has sold U.S. dollars across stock and fixed income portfolios, and built up what Vassallo described as a sizable position in options for funds that allow these strategies. He said the euro, yen and the Australian dollar are among the primary currencies it bought against the dollar, a big contrast to how the asset manager ended the previous year with a small "overweight" in the U.S. dollar. "This switch towards a more uncertain policy regime created an environment where we as market participants see the U.S. as more hostile to international capital flows, international trading," Vassallo said. After a June review, Justin Onuekwusi, chief investment officer at St. James's Place, said it is maintaining a strategic hedge that allows it to reduce overseas currency exposure in favor of the pound by up to 20%. The strategy "has been beneficial for our clients' returns year to date," he said. Onuekwusi said he now sees the dollar as closer to its longer-term fair value and has marginally reduced dollar hedging across managed portfolios. Foreign investors hold more than $30 trillion in U.S. securities, about $17 trillion of which is in equities and more than $12 trillion in long-term debt, according to data published in April by the U.S. Treasury Department. Marcus Fernandes, global head of currency management at Northern Trust, said the divergence in the correlation of risk is more than in the past. "That's why people are thinking faster than before, 'I need to increase my hedge ratio'," he said. "Once those conversations start, they usually end with increased hedge ratios," he said. COST INCENTIVE Data from Russell showed that a euro-hedged version of the MSCI USA index was flat for the year through May, while the euro-unhedged version was down 8.3%, showing the benefit of hedging for euro-based investors. The dollar is down 13% against the euro on concerns about flip-flopping U.S. trade policies and growth. "FX is back on the boardroom agenda," said Joe McKenna, head of fund solutions at MillTech, a London-based FX and cash management company. "What was once handled quietly in the back office is now drawing the attention of CIOs and CFOs, driven by renewed dollar volatility." Managers hedge currency exposure by selling the dollar against their respective base currency like the euro or the pound in the FX forwards market, and also use derivatives like options. When the dollar weakens, the hedge position gains in value while the dollar exposure on the underlying stock portfolio loses. Forward selling of the dollar is the largest in four years, according to John Velis, Americas macro strategist at BNY Markets, suggesting investors are unwilling to carry long dollar exposures, even with the potential for it to rally if U.S. tariff policy changes or the Israel-Iran conflict resumes. Investors reallocating to U.S. assets to meet benchmark weights after April's selloff are now hedging those exposures, he told Reuters. "It communicates that dollar volatility is a concern," said Velis. "It can be policy volatility as well as macroeconomic volatility that's causing people to... not keep that dollar exposure because of the fears of the dollar decline."
Reuters
01-07-2025
- Business
- Reuters
Foreign investors increase dollar hedges on US stock portfolios
NEW YORK, July 1 (Reuters) - Overseas asset managers and pensions are adding protection against a weakening dollar, concerned about the U.S. currency's diminishing ability to diversify their U.S. equity portfolios. Because such stock funds carry built-in dollar exposure, investors with other home currencies that had not neutralized the foreign exchange risk were cushioned when the dollar was strong if Wall Street performed badly. But the dollar's correlation with other U.S. assets, and the impact of its fall on portfolio performance, came into sharper focus when the Trump administration announced far-reaching global tariffs on April 2, sending U.S. stock indexes and the greenback sharply lower. The dollar (.DXY), opens new tab hit a three-year low against a basket of currencies, raising risks for investors whose portfolios once benefited from the natural hedge. Now, managers are reducing dollar exposures and increasing the hedge ratios for U.S. stock portfolios where clients' investment policies allow them to do so. About 10% of Russell Investments pension fund clients in Europe and the UK have already increased hedge ratios on their international stock portfolios, said Van Luu, global head of solutions strategy for fixed income and foreign exchange for Russell in London. One client raised it to 75% from 50%, highlighting the desire to have a greater portion of U.S. stocks protected against the weakening dollar. "If what we're seeing persists... then you will have more clients taking action in that direction," said Luu. The dollar is down 10% for the year, and 6.5% since U.S. President Donald Trump's so-called Liberation Day in April. Meanwhile, the S&P 500, the benchmark U.S. stock index (.SPX), opens new tab, has recovered 24% since an April slump and is up 5.3% this year, flirting with record highs. The MSCI gauge of global stocks, minus the U.S., (.dMIWU00000PUS), opens new tab has risen 16% for the year. "It's not enough to look at the stock market and say it is more or less back to where it was, so nothing happened," said Peter Vassallo, FX portfolio manager at BNP Paribas Asset Management, who manages currency exposures across its asset classes. BNP has been reducing dollar exposures for its clients that include pension funds, sovereign wealth funds and central banks. It has sold U.S. dollars across stock and fixed income portfolios, and built up what Vassallo described as a sizable position in options for funds that allow these strategies. He said the euro, yen and the Australian dollar are among the primary currencies it bought against the dollar, a big contrast to how the asset manager ended the previous year with a small "overweight" in the U.S. dollar. "This switch towards a more uncertain policy regime created an environment where we as market participants see the U.S. as more hostile to international capital flows, international trading," Vassallo said. After a June review, Justin Onuekwusi, chief investment officer at St. James's Place, said it is maintaining a strategic hedge that allows it to reduce overseas currency exposure in favor of the pound by up to 20%. The strategy "has been beneficial for our clients' returns year to date," he said. Onuekwusi said he now sees the dollar as closer to its longer-term fair value and has marginally reduced dollar hedging across managed portfolios. Foreign investors hold more than $30 trillion in U.S. securities, about $17 trillion of which is in equities and more than $12 trillion in long-term debt, according to data published in April, opens new tab by the U.S. Treasury Department. Marcus Fernandes, global head of currency management at Northern Trust, said the divergence in the correlation of risk is more than in the past. "That's why people are thinking faster than before, 'I need to increase my hedge ratio'," he said. "Once those conversations start, they usually end with increased hedge ratios," he said. Data from Russell showed that a euro-hedged version of the MSCI USA index was flat for the year through May, while the euro-unhedged version was down 8.3%, showing the benefit of hedging for euro-based investors. The dollar is down 13% against the euro on concerns about flip-flopping U.S. trade policies and growth. "FX is back on the boardroom agenda," said Joe McKenna, head of fund solutions at MillTech, a London-based FX and cash management company. "What was once handled quietly in the back office is now drawing the attention of CIOs and CFOs, driven by renewed dollar volatility." Managers hedge currency exposure by selling the dollar against their respective base currency like the euro or the pound in the FX forwards market, and also use derivatives like options. When the dollar weakens, the hedge position gains in value while the dollar exposure on the underlying stock portfolio loses. Forward selling of the dollar is the largest in four years, according to John Velis, Americas macro strategist at BNY Markets, suggesting investors are unwilling to carry long dollar exposures, even with the potential for it to rally if U.S. tariff policy changes or the Israel-Iran conflict resumes. Investors reallocating to U.S. assets to meet benchmark weights after April's selloff are now hedging those exposures, he told Reuters. "It communicates that dollar volatility is a concern," said Velis. "It can be policy volatility as well as macroeconomic volatility that's causing people to... not keep that dollar exposure because of the fears of the dollar decline."
